The president of cybersecurity giant RSA explains how its $2.1 billion breakup deal with Dell will return it to its ‘scrappy’ startup days: ‘How often do you get to do that as a 38 year old company?’ (DELL)

  • Last February was a tough time for RSA President Rohit Ghai. He announced a $2.1 billion leveraged buyout deal that set the stage for cybersecurity giant RSA to separate from tech behemoth Dell.
  • But the deal was also finalized just as the coronavirus crisis was escalating, disrupting the RSA Conference in San Francisco and eventually plunging the tech industry into a time of uncertainty.
  • But as RSA prepares to become a standalone company in September, Ghai points to a more upbeat future as cybersecurity has become an even more critical need in the era of remote work.
  • “We are separating from Dell, and we’re standing up our own IT systems and technology stack,” Ghai told Business Insider. “Imagine being a 38 year old startup that has this beautiful opportunity to start from scratch. That’s exciting.”
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Rohit Ghai, president of RSA, kicked off 2020 with a big move: negotiating a deal that would divorce the cybersecurity company from tech giant Dell.

The timing turned out to be tricky: Ghai announced the $2.1 billion sale of RSA to a consortium led by Symphony Technology Group in February just as the coronavirus was escalating, disrupting their big cybersecurity gathering in San Francisco and subsequently upending the tech industry.

“The final 48 hours of the negotiation process were a nail biting time,” he told Business Insider. “We announced the deal on February 18. From a pandemic timeline perspective, that’s when the snowball had started to come down when the avalanche was building.”

Now, just a few weeks before RSA’s divorce with Dell becomes final, Ghai has a dramatically more upbeat view of what’s ahead for his company in the COVID era which led to a spike in demand for technology to help businesses adapt to the sudden shift to remote work. One of them is cybersecurity.

“We’re one of the work-from-home economy technology stacks,” Ghai said. “And we’ve seen a massive surge in demand for our business.”

RSA became part of Dell after the Texas company acquired EMC in 2016. Dell decided to offload RSA to “further simplify our business and product portfolio,” the company said when the buyout was announced.

In a way, it means returning to RSA’s origins as a lean, nimble startup founded in 1982, which emerged as one of the pioneering cybersecurity software companies.

“We are separating from Dell, and we’re standing up our own IT systems and technology stack,” Ghai said. “Imagine being a 38 year old startup that has this beautiful opportunity to start from scratch and craft your digital stack and your technology stack and reimagine your IT infrastructure. How often do you get to do that as a 38 year old company? That’s exciting.”

‘There’s certainly been a buyer’s euphoria’

Ghai said that for Symphony, the investment group that led the leveraged buyout, “there’s certainly been a buyer’s euphoria.” Cybersecurity has long been considered a growing market, but the remote work boom has accelerated the pace and made it hotter than ever. Spending on information security and risk management is projected to total $123.8 billion in 2020, and is expected to grow to $143.4 billion by 2022, according to analyst firm Gartner. 

With the sharp pivot to remote work, businesses, including big corporations, have had to scramble to ensure that their employees are working on highly-secured networks, especially for those working from home. But even before the crisis, major changes in enterprise technology had been forcing security software companies to adapt to more complex needs.

The biggest one is the cloud which lets businesses set up networks on web-based platforms, which made it possible to scale down or even abandon private, on-premises data centers. The more widespread use of smartphones and tablets has also created new security challenges, with people increasingly able to do work well outside the safety of a corporate firewall. 

“We used to be in the castle and moat model where we had a perimeter,” he said. “And then the perimeter disappeared.”

Meanwhile, the threats continue to grow and become more sophisticated. In fact, Ghai uses the battle against COVID-19 pandemic to explain how RSA views the threats.

‘A startup scrappy mindset’

“It’s not just about eradicating the virus, it’s about bending the curve right up to point when the virus will go away,” he said. “Similarly in cybersecurity, success is not eradicating threats. Success is making sure business can continue despite the existence of breaches and threats and stuff like that.”

RSA hopes to become a more successful cybersecurity provider when it becomes  a standalone entity in September when Ghai said it hopes to be transformed into “a smaller company with a startup scrappy mindset.”

“We’ll try to go faster on behalf of our customers and make decisions faster,” he said.

Ghai suggested that wasn’t always to do as part of a tech behemoth like Dell. Dell, which became a massive company when it acquired EMC, is struggling to reinvent itself into a more cloud-focused hardware and software company. The Texas company recently announced that it may also spin off VMware in 2021.

“In this new independent configuration, I believe we’ll be better positioned to be leaner, meaner, faster,” Ghai said.

Got a tip about Dell, RSA or another tech company? Contact this reporter via email at bpimentel@businessinsider.com, message him on Twitter @benpimentel or send him a secure message through Signal at (510) 731-8429. You can also contact Business Insider securely via SecureDrop.

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